Colombian equities expert enters Europe

The market the fund focuses on is relatively small, but nevertheless produced some of the best returns in emerging markets over both three and five years to 31 December.

Over three years Colombian shares made 123%, according to Standard & Poor’s. This was almost double the average return from 20 EMs, of 62.8% over the period.

Colombia was only beaten over three years by markets in the newly revived Tiger economies of Indonesia (220%), Philippines (169.3%) and Thailand (150%).

Last year, when EMs fell by an average 22.9%, Colombia’s dropped by 12%. This placed it fifth among EMs. Developed markets lost 8.2%.

But this year even Colombia’s market has been muted – blue chips are flat – largely because investors feel concern over how stresses in Europe could affect Colombia’s economy.

Colombian exports to European Union increased between January and Spetember last year by 76%, from $3.6bn to $6.3bn.

Trade minister Sergio Diazgranados recently told journalists his government aims to grow Colombia to be Latin America’s third largest economy in two years, overtaking Argentina and smaller than only Brazil and Mexico.

Colombia’s economy grew 7.7% in last year’s third quarter, and Bogota expects 5.5% growth for all of 2011, and 2012 as well.

Bolsa y Renta has about $2.1bn in the stock market.

Since February 2007, ByR’s local equity fund made gross outperformance of 8.2% versus its benchmark in US dollars. Colombian stocks made

Linus Sluyter, head of international wholesale at ByR in Colombia, noted Colombia is Latin America’s fourth largest economy, “and is just starting to appear in the spotlight of international investors.

“Colombia is one of the most dynamic regions within the EMs and in particular in Latin America. The country offers prudent macro-economic policies, political stability and a very business friendly environment, combined with great economic growth prospects.”

Philip Kalus, managing partner of accelerando associates, the agency in charge of co-ordinating European marketing to sophisticated investors, said family offices and local country specialists had already shown interest in the fund.